HONG KONG, China (CNN) -- Few issues in the environmental movement get people as riled as plastic.

Plastic, not so fantastic: Landfills around the world are drowing in plastic bags.

Yet despite what appears to be widespread public outrage at the harmful environmental impacts of plastic bottles and bags in particular -- perhaps the most ubiquitous items in modern day life -- recycling rates have remained fairly stale overall while production levels have in many cases gone up.

Take plastic bags, which, depending on whom you ask, have now reached production levels of anywhere from 500 billion to 5 trillion units a year. Only 1 percent is recycled globally each year.

Plastic bottles meanwhile are among the most readily recycled plastic products of all, yet in some countries, as much as 90 percent of water bottles end up in landfills.

In the U.S., the world's biggest consumer market for bottled water, sales hit a record 8.82 billion gallons in 2007, a 9.5 percent increase from 2005. Sales of bottled water in the U.S. have now overtaken sales of milk and are close to outselling beer.

Historically, such increases in sales have run parallel to drops in recycling rates, unfortunately.

Increased production, less recycling

In 1995, when there was just 1.95 billion pounds of polyethylene terephthalate ("PET 1") bottles in circulation in the U.S., the country boasted recycling rates of nearly 40 percent.

By 2005, when retailers were stocking up to 5 billion pounds of PET bottles, recycling rates had dropped to 23 percent.

Sweden however has managed to reach plastic bottle recycling rates of around 80 percent. So what are countries like the U.S. doing wrong?

Some blame an immature recycling market in the U.S. for not being able to handle higher volumes of plastic; a lack of infrastructure has effectively held the market's development back.

It is certainly a small one -- just one company in Virginia, for example, takes care of recycling duties for around 70 percent of all the plastic bags sent for recycling, but it is not yet a profitable business, losing $75 million in 2007.

Others say increasing production levels are overwhelming consumers. It's certainly possible: Americans threw away six times as many water bottles in 2004 as they did in 1997 when there were far fewer in circulation.

Today, despite the fact that 80 percent of American households have access to plastic recycling programs, only around one in four of them take their plastic bottles to the recycling bins.

Why recycle?

What may not be helping matters is that often people don't know why they are supposed to be recycling plastic anyway.

In a 2007 national survey of American beliefs about recycling, for example, it was discovered that as much as 72 percent of Americans don't know that plastic is an oil-based product (around 10 percent of U.S. oil consumption goes into making plastic); while 40 percent of them think that plastic biodegrades underground, in composts, in landfills, or incredibly, out at sea.

The truth is it doesn't biodegrade at all, at least not for up to a thousand years or more.

Compounding the problem is the different types of plastic in circulation at any one time, each needing different recycling treatments.

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What essentially makes one type of plastic different from the other is the type of resin used to make it. The number inside the triangular logo on the sides of plastic containers gives you that information (many people mistakenly take that logo to mean the product is recyclable -- it doesn't).

There are around seven different types of plastics in circulation today. And they don't always mix. You can't put all plastic bags in the same recycling bin, for example.

Even worse, if you put the "wrong" bags in a regular recycling bin, you can be doing more harm than good, as they can "contaminate" the stuff that is allowed in those bins during the recycling process.

These "wrong" bags are made from low-density polyethylene film, identified as resin code "LDPE 4" which characteristically are the heavier, thicker and more durable plastic bags that clothing stores tend to hand out. They can be recycled, just not in the same way as the the thinner bags that supermarkets hand out, which are made of high-density polyethylene, and numbered as resin code "HDPE 2". These are more easily recyclable largely because there are more recycling bins that cater for them.

Incentives and bans: the way forward?

There have been stronger calls for firm government leadership on the issue and for retailers to take proactive action themselves, in the hope that things will get done that much quicker.

The main reason Sweden has such high plastic bottle recycling rates, for example, is largely down to its mandatory nationwide refundable deposit program on PET bottles.

Other countries have joined the trend to ban plastic products instead, particularly plastic bags, which have much lower recycling rates.

China is the latest country to join the small but growing group of nations to implement a ban on plastic bags. All 'ultra-thin' bags are banned outright, and from June 1 retailers are banned from issuing free bags.

The country gets through a staggering 3 billion plastic bags a day; and uses up 37 million barrels of oil a year to make them.

However, the plastics lobby has heavily criticized the growing call to ban plastic bags globally, arguing that it could actually be damaging to the environment to do so.

The American Chemistry Council (ACC), for example, believes that plastic should be repeatedly recycled, arguing that banning plastic bags would simply switch the problem to another material. According to the ACC paper bags are even more environmentally-damaging and energy-intensive to make than plastic.

As for bottles, it argues that if you replaced plastic with glass to serve up 8 gallons of drink, you would need 27 pounds of glass to do the same job as 2 pounds of plastic.

Other industry groups like the British Retail Consortium (BRS) also argue that taxing bags won't work either, pointing to the case in Ireland which banned plastic bags in 2002. It reduced plastic bag usage by 90 percent in a matter of weeks, but was followed by a 300-500 percent boost in the sales of plastic refuse bags and bin liners, BRS says.

Rising oil prices could mean force recycling

Aside from government intervention, what may force plastics manufacturers to increase the usage of recycled plastic could be rising oil prices.

The plastics industry is heavily dependent on the oil and natural gas industries.

The bottling industry alone now uses up around 100 million barrels of oil a year to produce their product packaging, and that doesn't include the fuel used to transport them around the world.

One of the industries driving demand are automakers, which, in a twist of irony are seeking plastic components out in a bid to be more environmentally-friendly.

According to the UK's Waste & Resources Action Program, known as WRAP, more automakers are using plastic components in their cars because it makes them lighter and more fuel-efficient.

With automakers, among other industries, using more plastics, many believe demand for plastic is going to keep going up, which won't help recycling initiatives.